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which, combined with the unsettled state of credit, these noble-spirited gentlemen found themselves seriously involved: for not only was the whole cap. of the bank lost, but their private fortunes were involved. They met the loss by raising about £450,000 on sale of annu. for one or two lives, with a condition for redeeming them by paying a half-year's annu. over the purchase-money, and the annu. due at the time of redemption. In 1774 the annu. were redeemed by means of bonds of £50, secured upon unentailed estates in Scotland; and to be redeemed by four instalments, the last of which was faithfully discharged in 1782.

In 1773 the 3rd ed. of Dr. Price's Observations, etc., appeared. Having devoted so much space to the previous eds., we do not propose to dwell upon this. Indeed, there is little really new in it regarding the annu. sos. The author says:

Several of the annu. sos in Lond. have been dissolved, and there is reason to hope that those which still remain will not be able much longer to support themselves on their present plans, in opposition to the evidence of demonstration, and the calls of justice and humanity.

In 1773 the first of the three Irish Tontines, whose annuitants afterwards became the subject of investigation by Mr. Finlaison in 1829, was set on foot, under the authority of 13 & 14 Geo. III. c. 5 (Irish statutes). The annu. were at 6 p.c. int. and assignable. In the same year a measure was introduced to, and passed though the House of Commons, under the patronage of Mr. Burke and other prominent men, for the purpose of enabling the industrial classes to invest their savings in the purchase of deferred annu. on their lives; but the measure was rejected by the Lords.

In 1774 Mr. Thomas Ashmore pub. in Lond., An Analysis of the several Bank-Annu. from the First Year of their Creation to this Time; with references to the different Acts of Parl. passed relative thereto.

In 1775 the second Irish Tontine was set on foot under the authority of 15 & 16 Geo. III., c. 2 (Irish stat.). The annu. carried 6 p.c. with unlimited survivorship. The nominees in this Tontine also were included in Mr. Finlaison's obs. in 1829.

During the greater part of this year a violent feud was raging between Mr. Dale and the managers of the Laudable So. of Annuitants. Mr. Dale had, as we have seen (1772), pointed out the impossibility of the asso. continuing to pay the annu. it had promised to its members; and had offered his services to such of the members as desired investigation. This offer was accepted. Mr. Dale made further investigations. His results were challenged by the management, and his motives violently assailed. Dr. Price and Mr. Benjamin Webb supported Dale's calculations. We cannot follow the controversy here; but shall speak of it again in our hist. of Laudable So. of Annuitants.

In 1775 Mr. Charles Brand pub. A Treatise on Assu. and Annu. on Lives, with several Objections against Dr. Price's Obs. on the Amicable So. and others. To which was added a short, easy, and more concise method of calculating the value of annu. and assu. on lives than any theretofore pub. There is nothing in this work calling for any special attention here.

In 1776 there appeared in Phil. Trans. from the pen of Dr. Price, Short and easy Theorems for finding in all Cases the Differences between the Values of Annu. payable yearly, and the Sum payable half-yearly, quarterly, or monthly. In the same year there was pub. anon., Reflections on Gaming, Annu., and Usurious Contracts; and a miscellaneous treatise by Mr. W. Emerson, on several mathematical subjects: among them annu.

We now, 1777, arrive at another phase in the hist. of Life Annu. That dealings in these had long been made a cover for the practice of usury, we have already more than hinted, and that fact was well known at this period. Proceedings in the courts of law revealed some of the worst cases, and the imagination duplicated these ; although the facts were sufficient to draw attention to the subject unaided by the imagination. A scheme by way of remedy was propounded, it was stated upon the model of similar measures in operation in France and Italy, viz., the fixing a scale or table according to the age of the grantor at the time of the grant, with reference to which the amount of the annu. was to be limited. The subject was taken up in the House of Commons. It was referred to a committee, "appointed to take into consideration the laws then in being against usury, and the present practice of purchasing annu, on the life of the grantor." This committee examined many leading solicitors, and also the principal officers of the Amicable and Equitable, and ultimately prepared and presented to the House the following resolutions :

(1). That it is the opinion of this Committee that the purchase of annu. for the life of the grantor, being generally intended as a loan of money, ought to be regulated accordingly. (2). That 4 p.c. is a sufficient compensation for the risk of a life above 21 years and under 25 years. (3). That 4 one-half p.c. is a sufficient compensation for the risk of a life above 25 years and under 30 years. (4). That 5 p.c. is a sufficient compensation for the risk of a life above 30 years and under 35 years. (5). That 5 one-half p.c. is a sufficient compensation for the risk of a life above 35 years and under 40 years. (6). That 6 p.c. is a sufficient compensation for the risk of a life above 40 years and under 45 years. (7). That 6 one-half p.c. is a sufficient compensation for the risk of a life above 45 years and under 50 years. (8). That to take any larger ann. sum than the legal int of each £100 advanced in the purchase of an annu. for the life of the grantor, together with the sums above specified, being the value of the respective risks attending such annu., ought to be made usury. (9). That all annu. for the life of the grantor ought to be redeemable on the payment of the sum advanced, with the arrears of the annu. to the time of payment.

Upon these resolutions a Bill was introduced to the House, framed in conformity therewith. There was much diversity of opinion concerning the measure. Its advocates held it forth as a sure preventative of many former abuses; others regarded it as altogether a futile attempt to regulate private dealings beyond the scope of enlightened legislation.

In the end there was passed, this same year, the 17 Geo. III., c. 26.-An Act for registering the Grants of L. Annu: and for the better protection of Infants against such Grants. The preamble sets forth, "Whereas the pernicious practice of raising money by the sale of Life Annu. hath of late years greatly increased, and is much promoted by the secrecy with which such transactions are conducted, be it therefore enacted," etc. And it was enacted: that a memorial of all deeds, bonds, etc., for granting Life Annu. should, within twenty-one days of the execution thereof, be enrolled in the Court of Chancery ; which memorial should contain the date, names of the parties, witnesses, etc.; otherwise every such deed, bond, etc., should be void. All future deeds for granting annu. were to contain the consideration, "which shall be in money only," and the names of the parties in words at length. All contracts for the purchase of annu. with any person under 21 years of age were to be void. Any person who should procure, or solicit, any minor to grant an annu., etc., should be punished by fine or imprisonment, etc. Solicitors, scriveners, etc, who should take more than 10s. per £100 for procuring money for annu. should be punished by fine and imprisonment. There were a few exceptions, such as annuity or rent-charge under will or marriage settlement, to which the Act did not apply; nor did it apply to annu. granted by any corporate body, or any authority or trust created by Act of Parliament.

Even this Act-very different from the orig. measure-was not passed without some considerable opposition. We find in the Morning Chronicle and Lond. Advertiser, 6 May, 1777, a very strong article against it, from which we will only extract the following:

The result will be that a multitude of gentlemen in every part of the three kingdoms (for almost all their loans have been made in London) will find, to their inexpressible astonishment and indignation, their most private concerns and important secrets become the talk of the whole neighbourhood. The consequences to the peace of families must be dreadful beyond description; and it will render the members of parl., and especially the knights of shires, who perhaps have never attended to this matter, and therefore neglected to oppose this tyrannical, unconstitutional, ex post-facto clause, so extremely unpopular and odious in their several counties as to ruin their interests with the most useful and respectable of their constituents, or subject them to an immense deal of extra trouble and expense to get re-elected; for when such a clause has once passed, all the mischief will be done, and no reparation can be made to the sufferers, as in other cases, by repeal.

In the Morning Post and Daily Advertiser, 5 May, 1777, we find the following:

Annuity Act.-Any man of known honour and consideration desirous of raising a temporary sum of money by the grant of an annuity for his life, redeemable at his pleasure, may be supplied to a capital amount by a person of very respectable situation and character. If immediate application is made the registering of the transaction in the Court of Chancery, as directed by the intended Annuity Act, will be avoided. At the same time, such gentlemen as think proper to apply may be assured that the business (though previous to the Act being in force) will be negociated without the least exaction on the grantor. It is requested that applications may be made by letter to A. A., to be left at Mr. Jenkinson's, Charles Street, Soho Square, which will be instantly attended to.

In the Morning Chronicle and Lond. Advertiser of the 8th of the same month the advertisement is repe

repeated.

It has been said of this Act, that during its existence it gave rise to more litigation than perhaps any other statute since Magna Charta; and according to Sugden, the Courts, in their dislike to it, frequently carried their decisions not only beyond the letter, but occasionally beyond the spirit of the law. It has been further remarked of it, that, although the very doubts and difficulties it created might have a tendency in some degree to limit loans by way of annu., they yet, as a necessary consequence, rendered such transactions more onerous on those who ventured to engage in them. The lender was sensible of the risk and danger he ran of having his deeds set aside on some technical ground, foreign to the merits of the contract, such as an imperfect memorial-a document which it appears few lawyers could prepare with the certainty of its standing the scrutiny of the Courts, and he, the lender, therefore seldom failed to exact such an increased percentage as an insurance against the hazard he ran of losing the securities for his money. Thus the borrower, or grantor, paid not only the high rate of int. for the use of the sum lent, which the state of the times required, but a heavy surcharge upon the market rate, as the other compensation for the danger incurred by lending it. -Kelly. The Act, which did not extend to Scotland or Ireland, was repealed in 1813, by 53 Geo. III., c. 141, and re-enacted in another and more specific form.

Macpherson, in his Hist. of Commerce, says, "This remedial Act, framed with the wisest and most benevolent intentions, has been perverted by mistakes and violent misconstructions so as to be made to hold out encouragement and protection to many infamous frauds."

Shortly after the resolutions of the parl. committee had been made public, there appeared in the pages of the Gentleman's Mag., a paper-The Value of Annu. to Prevent Usury Accurately Stated, signed "W. D. author of Calculations of the Value of Annu." The writer was William Dale, already spoken of. He says the plan of the committee was much approved of "on account of the plain method of distinguishing between money

paid for rate of int., and that paid for risk of life." He then furnishes some tables to show that the committee allowance for risk of life was not only compensation fully sufficient, but at some ages much more than sufficient, "even by Lond. Mort., which is greater than by most, or perhaps by any other bills." He adds, this may expose the exorbitance of usury in general; and indeed his principal motive was to inform borrowers of the great interest which they unthinkingly pay by such mode, "hoping they may have discretion to profit by the explanation.' He contended that the utmost compensation for the risk of life ought not to exceed what the Equitable So. required, "because no calculation from any table of mortality allows so much." He thus concludes his letter :

Nevertheless, to obviate any cavilling, let the committee's full allowance be admitted. Then a person advancing £100 on the life of age 21, ought to receive £4 annually for risk, and which being paid, he could not lawfully receive more than 5 p.c. for int., which would be 9 p.c. in the whole for the loan: and which would be at the rate of 11 years 40 days' purchase; or, which is the same, £11 25. 2d. should be paid for each £1 annuity.

But if age 21 should grant an annuity for six years' purchase, it would be paying at the rate of £16 13s. 4d. int. p.c. p.a.; out of which, deducting the full compensation of 4 p.c. for risk of life, the remainder would be £12 135. 4d. for int. simply.

As to pretence of lives on which annuities are obtained being more than commonly hazardous, on account of a freer manner of living, or on whatever other account, will those engaged in such traffic deny that they are particularly cautious of adventuring to advance money on any life which they cannot get insured, unless it appear to them so good that they chuse to abide the chance of it themselves? The Equitable So. insures this age of 21 for £3 gs. 4d. p.c. p.a., in which case, therefore, the purchaser might enjoy £13 45. p.c. clear annuity for int. only, without risk, having secured the whole capital to be repaid on the demise of the grantor.

Usurers understand these advantages so perfectly that there can be no need of information to them; but if these explanations could induce the thoughtless prodigal to reflect on the unconscionable price (attended with other expenses) paid for present enjoyment, it might restrain immoderate pursuits, and render future moments more comfortable.

The learned Blackstone, who wrote his famous Commentaries shortly before this period, offered the following observations on the subject now before us :

The practice of purchasing annuities for lives at a certain price or prem., instead of advancing the same sum on an ordinary loan, arises usually from the inability of the borrower to give the lender a permanent security for the return of the money borrowed at any one period of time. He therefore stipulates (in effect) to repay annually, during his life, some part of the money borrowed, together with int. for so much of the principal as annually remains unpaid; and an additional compensation for the extraordinary hazard run of losing that principal entirely by the contingency of the borrower's death; all which considerations being calculated and blended together will constitute the just proportion, or quantum, of the annu. which ought to be granted. But as the right to recover the principal is put in jeopardy, a transaction of this kind (however high might be the amount of the annu. exacted by the lender, in proportion to the sum advanced) was never considered, at least in our own times, as an usurious bargain. Nor has it ever been deemed of that character, though the life of the borrower be ins. (as is an usual practice) at some ins. office for the benefit of the lender, and the amount of the annuity be so adjusted as to cover the expense of such ins.; nor though the borrower himself agree to insure his own life, at his own expense, for the benefit of the lender; though by such arrangements the latter is indirectly protected (supposing the office to be solvent and the insurance kept on foot) from all danger of losing the sum advanced.

As a means of defeating the Usury Laws, the device was a success.

In this very year, 1777, an important annuity case arose, of which Francis (Annals, etc.) furnishes the following graphic account:

During the minority of Sir John St. Aubyn, and at the early age of 17, this gentleman found himself, like many more, in want of money. The scriveners of the City were ready, the extravagancies of the youth supplied, an unlimited amount of cash was placed in his possession, and in return he granted to the underwriters annu. guaranteed on the estates to which he would succeed at 21, assu. his life with them in the mean time to guard against contingencies. Not content with this, the underwriters made him procure the additional guarantee of a schoolfellow, for which the young scapegrace pledged his honour to his friend. When he came of age, he fortunately arrived also at years of of discretion, and instituted a suit in Chancery for the destruction of the bonds which he had granted. Great was the wrath of the money-changers, but their anger was vain, and they were obliged to content themselves with the righteous decision, that on repayment of the principal, with 4 p.c. int., the annuity bonds should be given up. Nor was this a solitary instance in which the assu. and annu.-mongers were over

reached.

It will be incumbent on us, when we reach the subject of USURY, to show how and when the several forms of evasion from time to time practised arose. This we believe we shall be able to accomplish. Confining ourselves here to Annuities on Lives only, we need but state that when it once came to be admitted that there was no usury when the principal advanced was put at risk, the device of the borrower selling an annuity for the duration of his life to the lender appeared complete. And even when the jurists, not readily outwitted, made good the position that both principal and interest must be in danger of being lost, to lift the transaction entirely out of the category of usury, it will be seen that the dealings in Life Annuities even met this emergency. But the money-lenders had barely built upon this bulwark of protection to their operations, than they commenced to sap it to its very foundations. They did not want the practice to realize the theory. They did not want either their principal or their interest to be in jeopardy; and they know the remedy. It was by means of Life Ins. If they insured the life of a borrower, then his death, which indeed caused the stoppage of the annuity, brought them back their principal. It was a long time before the Courts became reconciled to this paradoxical evasion; but they ultimately did so. Another danger also threatened. The borrowers grew tired of placing themselves entirely at the mercy of the lenders, and they devised the system of redeemable annuities. Again the Courts rebelled, but ultimately succumbed. We shall treat of these points more at large as we proceed.

In 1777 also Mr. Wm. Dale pub., A Supplement to Calculations of the Values of Annu. pub. for the Use of Sos. instituted for Benefit of Age. Containing various illustrations of the Doctrine of Annuities, and Compleat Tables of the value of £I immediate Annu. (being the only ones extant by half-yearly Int. and payments). Together with investigations of the state of the LAUDABLE So. of Annuitants, showing what annu, each member hath purchased, and the Mort. therein from its institution, compared with Dr. Halley's table; also several Publications, Letters, and Anecdotes relative to the So., and explanatory of proceedings to the present year, etc. The writer in his opening para. shows pretty well what had been the consequence of the raid made by Dr. Price and himself upon the annu. asso. of which we have already spoken :

Of all the deluding inst. for benefit of age, the writer knows of but three at present remaining. Of these only one (he believes) has attempted reformation, and that attempt has been frustrated merely because the intelligent and humane were in the minority. To prove this allegation true, the author of Calculations, etc., thinks it incumbent on himself to submit to inspection of an impartial and candid public, such calculations as he presumes may fully demonstrate it to the entire satisfaction of all who read with willingness to understand. For which purpose compleat Tables of £1 annu, by half-yearly int, and payments; Tables of what annu. each member in the Laudable So. of Annu. has purchased; and the actual state of mort. in that So. from its institution, are here subjoined. And these the writer deems himself called upon by both the contending parties to produce.

He then recounts many points of the controversy to which we have already specifically

referred.

Contrasting the smaller Mort. which had been experienced in the Laudable So. of Annuitants against that which had been experienced by the Laudable So. for the Benefit of Widows, he offers a practical suggestion, which is now generally supposed to be the result of modern sagacity :

It may be that tables of mort, which include a mixture of healthy and ailing, would not agree with either of these sos, separately; for it might be expected beforehand that fewer would die in the first, and more in the last, than what the tables suppose. Such consideration would direct the application of tables which suppose the fewest deaths to the So. of Annuitants; and the contrary to the other So., as the most prob. means of approaching nearly to the real state of mort. in each So. Accordingly, comparison finds that real longevity in the Laudable So. of Annuitants exceeds that supposed even by BRESLAW BILLS; and perhaps comparison would find that real mort. in the other, and such like sos., would exceed that supposed by even Lond. Bills were it not for the particular consideration which counter checks, by taking all possible precaution to admit no life suspected of unhealthiness, either in state of body or profession.

He then addresses the following remarks to the orig. founders and then managers of the Laudable So.

Do they not know that the inst, according to their plan is the direct reverse of "laudable"? Will they themselves presume to term it laudable to have seduced unwary believers to hope for £44 annu. by constant promise and formal agreement? Will they term it laudable to mock the deceived and disappointed, by telling them that "the Sec. always informed every member at entrance what the cap. was, and the number of members-it was for them to calculate? Will they term it laudable or humane to tell deluded age that the promised annu. cannot be paid; and even so much as has been purchased and might be received, shall not be paid them; for that they the first members having bought the least, and being the majority, have desire and intention, nay, have already resolved to be sharers in the stock equally with those who have purchased the very most, and depended on agreement, and on their promise, to receive it with addition; that is not less than £44 during life?

In this vol. was contained (p. 49) a table showing the value of life annu. by halfyearly payments, int. 3 p.c. according to Simpson's and Halley's Tables; the first time, we believe, that half-yearly values had been calculated.

In

In 1778 the Government raised a further sum of money by the sale of life annu. this year also the third Irish Tontine was set on foot; and the nominees, in each case, were included in Mr. Finlaison's Observations in 1829.

In 1778 also was pub., Articles of the Universal Inst. for Annu. and Assu, on Lives. In three parts. [HIST. OF LIFE INS.] And in the same year, by W. Backhouse, A Dissertation on the Value of Life Annu, deduced from general principles clearly demonstrated, and particularly applied to the Schemes of the Laudable and Amicable Sos. of Annu. for the benefit of age. Also, same year, at Vevey, by M. Fatio, an extensive collection of tables, embracing some on annuities.

In 1779, by 19 Geo. III. c. 18, the sum of £7,000,000 was authorized to be raised on Annu.; and £490,000 by a Lottery. Every £100 sunk for an annu. was to produce a £3 p.c. annu. redeemable by Parl.; and also an annu. of £3 15s. p. c. for 29 years, and then to cease. But every subs. might exchange the last-named annu. for a life annu. on intimating a desire to do so before a certain day named in the Act, and naming a nominee: there being no restriction as to age of subs. or nominee. Persons who subs. a £1000 to the annu. fund were entitled to 7 tickets in the Lottery upon paying a further sum of £10 each for the same.

The Government of that period was driven to great extremities for raising money; and nearly every session one or two Annuity Acts were passed, generally accompanied by a

Lottery project. But most of the annu. granted were for terms of years or in perpetuity, and therefore do not require detailed notice here.

In 1779 Mr. Wm. Morgan, Actuary of the Equitable, pub. his Doctrine of Annu. and Assu. on Lives and Survivorships Stated and Explained. The particular degree of merit to be ascribed to this work has been the subject of some controversy. It appears to have been pub. very much at the instance of Dr. Price, who wrote the introduction, wherein he says:

The second chap. contains an explanation of the doctrine of life annu. in general, and of the principles on which their values are calculated. At the end of this chap. an account is given of the method of expediting all calculations of the values of life annu., which must, I think, be very acceptable to all who have ever employed themselves in making such calculations. In these two chap. Mr. Morgan has studied to render the subjects of which he treats as intelligible as possible to persons who may be unacquainted with mathematics.

Regarding the mort. table to be employed in the valuation of annuities, Mr. Morgan says:

The excellent Mr. Simpson has indeed given a table of the values of two joint lives agreeable to the London table of obs., but this table of obs. ought not to be much used, because representing the rate of mort. among the inhabitants of Lond. taken in the gross, it gives the values of lives much too low for the middling and the better sort of people in Lond. itself.

Again:

As by these methods the calculations are rendered pleasant as well as expeditious, I hope that ere long some person will undertake them, chusing for his guide the Northampton table of obs., which is perhaps better fitted for common use than any other.

There can be no doubt but that the work contained formule for the solving of questions in annuities, and in life contingencies generally, which were new and valuable; and as Dr. Price does not specifically claim these, Mr. Morgan is entitled to be regarded as the originator.

In 1779 M. de Saint-Cyran pub. his work, wherein the valuation of annu. on lives is treated algebraically, but in a manner much inferior in all respects to that of Mr. Simpson; and six tables are given of the values of annu.-on single lives, on the survivor of two lives, and on the last survivor of three, calculated from M. Kerseboom's table. Although the values in the cases of two and of three lives were only determined by approximation, these tables were just then a valuable acquisition to the science; but their use was entirely superseded only four years after by the pub. of others much more valuable. --Milne.

The accompanying column shows his annu. values on single lives at 5 p.c.

In 1780 Mr. Brand published an ed. of Smart's Tables, and therein was contained many problems in life annu., and also various tables of annu, values; all of which have been noticed here in their chronological order.

Table of Annu.
Values-5 p.с.

Age.

Years' Purchase.

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15.40

15

14.82

20

14.15

25

13.59

30

12.96

35

12 32

40

11.72

45

1105

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In 1781 M. Antoine de Parcieux pub. in Paris, Traité des Annu., ou des Rentes à Terme, [DE PARCIEUX.] In the same year M. Flourencourt pub. a work on Political Economy, wherein was contained a T. of annu. for single lives, deduced from De Parcieux's T. of Mort., but making the annu. payable at the end of every year the life survived; with a table of proportionate parts for add. to be made according to the period the annu. survived the year.

In 1783 Dr. Price pub. 4th ed. of his Observations, etc. This ed. was very much more comprehensive than the eds. which had preceded it; but it mainly demands notice from us here from the fact that it contained tables of money values deduced from the NORTHAMPTON T. of Mort. The author says hereon:

The 6th table, showing the mean prob. of the duration of life according to a register of mort. at Northampton, has been inserted in all the former eds.; but it is now given more correctly; and tables deduced from it have been added, of the expectation of life, and the values of single lives, and of any two joint lives at all ages, and for three rates of int. The labour of computing these tables was undertaken in order to set aside all occasion for using the defective valuation of lives founded on Mr. De Moivre's hypothesis; but not having been able to finish these computations till a great part of this treatise had been printed off, I have been obliged to continue the use of the old tables so far as to take from them many of the examples of the solutions of questions in the first and following chapters.

The other distinguishing feature of this ed. was, that it contained the SWEDISH Mort. T., with expectations and money values deduced therefrom. The learned author says hereon:

With respect to the tables in particular deduced from the Swedish obs., I cannot hesitate to pronounce that they exceed in correctness everything of this kind which has been hitherto offered to the public; and that nothing is wanting to make our knowledge in this instance compleat, but similar obs. in other kingdoms. By these tables I have been enabled to state minutely the different rates of mort. at all ages among males and females; and to form tables of the values of single and joint lives for each sex, as well as for both sexes collectively; in consequence of which I have been further enabled to determine the increase of the values of annu. payable during survivorship, occasioned by the longer duration of life among females; and thus to furnish a direction of some importance to the various sos. in this kingdom and abroad, for providing annu. for widows.

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